Method and apparatus for paying bills electronically using machine readable information from an invoice

ABSTRACT

Data capture which occurs at the consumer end of an electronic bill pay transaction is assisted by machine readable information in a standardized format on an invoice where the machine readable information includes biller identification and a C-B account number and the information is readable at the consumer end without prior arrangements being made specifically between the consumer and the biller. The biller identification is either a universal biller reference number or sufficient information to allow manual identification and contact with the biller. The machine readable information is an optically-readable bar code, characters in a font designed for error-free character recognition by optical or magnetic means.

BACKGROUND OF THE INVENTION

[0001] The present invention relates to the field of electronic billpayment systems (“bill pay”) which allow a consumer to direct theirbank, an agent of their bank, or a non-bank bill pay service bureau topay amounts owed to merchants, service providers and other billers whobill consumers for amounts owed.

[0002] U.S. Pat. No._____ (App. Ser. No. 08/146,515) issued to James J.Hilt et al. teaches a bill pay system in where each participating payeeis assigned a biller reference number (“BRN”). That patent (“the HiltPatent”) is commonly owned by the assignee of the present applicationand is incorporated by reference herein for all purposes. In the Hiltbill pay system, a consumer could make a payment to a biller without anyprior payment arrangements required between the consumer and the biller,so long as the consumer knew the biller's BRN and the consumer's accountnumber with the biller (C-B account number). Various electronic billpayment data entry methods are disclosed in Hilt, such as entry over atelephone link using voice recognition or using the keys of thetelephone, or entry into a personal computer program which eventuallytransmits the bill payment instructions to the consumer's bank or thebank's agent.

[0003] In other prior art systems, a biller creates an invoice whichincludes a remittance stub and sends the invoice with a request that theconsumer return the remittance stub with the consumer's check in paymentof the invoice (“white mail”). Because billers can rely on receiving theremittance stubs back, billers will typically encode each remittancestub to assist with automatic data entry of billing information into anelectronic billing system once the remittance stub and check arereceived. Thus, if the consumer returns the remittance stub, the billerdoes not have to rely on the consumer to correctly indicate the C-Baccount number. This system has worked well where billers actually doreceive the remittance stub. However, in an electronic bill pay system,paper documents do not generally change hands.

[0004] Because paper documents do not change hands, billers must rely onthe consumer for data capture of information from the invoice, which isgenerally less reliable than electronic (e.g., optically scanned) datacapture from remittance stubs at the biller's site. In addition, where aconsumer enters a C-B account number manually, the biller must stillperform manual data entry.

[0005] One solution in the prior art for ensuring correct data entry bya consumer is the pick list. With a pick list, the consumer submits alist of payees with a BRN and a C-B account number for each payee. Ofcourse, if the Hilt system is not used, more information than the BRN isrequired, such as the biller name, address telephone number, etc. Thelist of payees is then verified by the consumer's bank to ensure thatthe correct billers have been identified and that the C-B accountnumbers listed by the consumer are the account numbers for thatconsumer. Once this is done, the consumer is supplied with a pick listof billers. If the billers on the pick list are numbered, the consumerthen need only enter the pick list entry number in lieu of data captureof the biller identification and C-B account number. The pick list iseither a paper document, as might be used for telephone data entrysystems, or an electronic document, as might be used for personalcomputer based bill payment systems.

[0006] The problem with this approach is that the ability to connect aparticular consumer with a particular biller without any priorconnection is lost, since the consumer must have had the billerpreviously verified and placed on the pick list. Thus, a consumer cannotdecide to pay a new biller and make a payment without the interveningdelay for verification.

[0007] The pick list approach is also undesirable because C-B accountnumbers can change without any awareness of the consumer. For example,in the utility industry, C-B account numbers encode for a meter readingroute. The meter reading routes are periodically updated, as routes areoptimized and as new housing and commercial developments arise to alterthe optimization of routes and route distribution. Typically, a meterreading route for a given C-B account changes once each five years. Ifpick lists are used, or the consumer relies on other means of prestoringthe C-B account number, the transaction will be in error once each fiveyears. While this is not a problem for an individual error, if the errorcosts $25 to fix between the consumer's time, the biller's time and anycustomer service time and expense, the average cost per transaction isabout 41 cents since the error will occur in one out of each sixtytransactions (assuming monthly billing).

[0008] U.S. Pat. No. 5,283,829 (issued to Anderson) discloses a billpayment system where a bill is printed with an approval code. Theapproval code includes error coding and maps to the C-B account numberand the particular bill (i.e., it maps to a particular month if thebills are monthly). The mapping from the approval code to the C-Baccount number and the month are provided by a table maintained by thebiller. While this system is useful for a single biller and wherecurrent bills are paid in full, it does not include a biller identifierand therefore is not useful for a global system. Furthermore, there isno provision for automatic data capture of the data provided. A consumermust enter the number as printed on the bill, and entry errors areexpected, requiring the consumer to reenter the approval code.

[0009] Therefore, what is needed is an improved method and apparatus forcorrectly capturing data from an invoice including data specifyingbiller identification and a C-B account number.

SUMMARY OF THE INVENTION

[0010] An improved bill paying system is provided by virtue of thepresent invention.

[0011] In one embodiment of a bill pay system according to the presentinvention, participating consumers pay bills electronically toparticipating billers using a bill payment network (hereinafter “thepayment network”) and the data capture which occurs at the consumer endof the electronic transaction is assisted by machine readableinformation in a standardized format where the machine readableinformation includes biller identification and a C-B account number andthe information is readable at the consumer end without priorarrangements being made specifically between the consumer and thebiller. In a specific embodiment, the biller identification is suppliedby a BRN such as that taught in the Hilt patent.

[0012] The machine readable information can be read from a biller'sinvoice in a number of ways, depending on how it is present on theinvoice. For example, the biller could print the information usingoptically-readable barcode, using a font designed for error-free opticalcharacter recognition, or using magnetically-readable characters (MICR).Alternatively, a magnetic strip could be provided on the invoice.

[0013] In another variation, the machine readable information includes apayment due date and an amount due.

[0014] The information from the invoice is read, in various embodiments,by a smart card, a specially adapted telephone, a personal computer, orthe like. Regardless of the exact form of hardware, the hardwareincludes a means for reading the machine readable information. Forexample, if a smart card is used, the smart card would include a readingdevice.

[0015] If a smart card or other portable device, such as a “smartwallet”, is used to capture the billing data, the portable device mightbe provided to an automatic teller machine (“ATM”) for communication ofbilling instructions to the consumer's bank. A smart card or smartwallet would also serve the additional function of being a means toverify the authorization to issue bill payment instructions much like acredit card currently serves an authorization function. If the smartcard or smart wallet also had built in communication capabilities, suchas a modem and a telephone connection or a wireless modem, it would sendpayment instructions itself.

[0016] A further understanding of the nature and advantages of theinventions herein may be realized by reference to the remaining portionsof the specification and the attached drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

[0017]FIG. 1 is a block diagram of a prior art bill payment system withdata capture at a biller terminal.

[0018]FIG. 2 is a block diagram of a bill payment system with datacapture at a consumer terminal according to an embodiment of the presentinvention.

[0019]FIG. 3 is a schematic diagram of a printed bill used with thepresent invention.

[0020]FIG. 4 shows several embodiments of a data capture means.

[0021]FIG. 5 is a flow chart of a bill payment process according to thepresent invention.

DESCRIPTION OF THE PREFERRED EMBODIMENTS

[0022]FIG. 1 shows a bill payment system 100 which is commonly usedtoday to pay bills, where a consumer C pays a bill to a biller B when Bsends a bill 102 to C. It should be understood that the term “consumer”is used here as an example of a bill payor, and the invention is notlimited to use where the bill payor is a consumer. For example, theinvention works equally well where the payor is a reseller. The actualpayment of the bill occurs when a consumer bank (C bank) 104 transfersfunds from an account maintained for C to a biller bank (B bank) 106,who then credits the funds to an account held for B. The other elementsof system 100 are: a consumer terminal 108, which serves as the point oftransit for a bill payment 110 into a postal system 112, a billerterminal 114, which is the destination of bill payment 110, a billingdatabase 116 and a bill generator 118.

[0023] The bill payment process begins when biller B generates a billfor consumer C using billing database 116 and bill generator 118. Thegenerated bill 102 is typically in the form of a printed invoice with aremittance stub. Bill 102 is sent to consumer C, who then encloses acheck 122 drawn on the account at C bank with the remittance stub, andsubmits this bill payment 110 to biller B by post. Depending on billerB's instructions, the bill payment will go to either biller B or to anagent of biller B, such as a lockbox. When a bill payment is received,the necessary billing data is captured (payment amount, C-B accountnumber, etc.) and check 122 is sent to B bank 106 for presentment,typically via a clearinghouse 120, to C bank 104.

[0024] The ability of biller terminal 114 to accurately capture billingdata from the bill is generally the result of applying machine-readableencoding of the C-B account number onto the remittance stubs generatedby bill generator 118. Since bill generator 118 and biller terminal 114are both controlled by biller B, it is a simple matter to arrange for areadable encoding. Without the remittance stub, however, the billpayment becomes an exception item, which is many times more expensive toprocess than a bill payment with a remittance stub. With currentelectronic payment systems, it is assumed that the paper remittance stubis not presented to the biller.

[0025]FIG. 2 shows an electronic bill pay system 200 where theremittance stub is not used. In system 200, biller B sends a bill 202 toconsumer C. Consumer C uses a consumer terminal 204 to capture the dataneeded from bill 202 to generate a bill pay order 206. The data captureis a replacement for the prior art processes of addressing an envelopeto the biller and including the remittance stub in the envelope, i.e.,bill pay order 206 includes routing instructions to biller B andincludes an indication of the C-B account number for the bill payment.

[0026] Bill pay order 206 is transmitted to an electronic paymentnetwork 208, which effects the transfer of funds from a consumer bank (Cbank) 212 to a biller bank (B bank) 214, while providing accountsreceivable (A/R) data 210 to a biller terminal 216, which reads thecaptured C-B account number from A/R data 210 and applies a credit toconsumer C's account in billing database 218. Bills are generated bybiller B using billing database 218 and bill generator 220. In order toprovide backward compatibility, manual payments 222 can also be appliedto billing database 218.

[0027]FIG. 3 is a schematic view of a remittance stub 300. Stub 300 isshown with an indication of consumer C, biller B, an amount owed and adue date. Some of this information might be encoded in a legacy encodingregion 302, which is used by biller B when stub 300 is returned withwhite mail mail payment. This legacy encoding region is generally onlydecodable by biller B, and in any case, no other entity has a use forit.

[0028] Stub 300 also includes a universal encoding region 304, whichencodes data to be captured by consumer C which identifies biller B andthe C-B account number. In the stub shown in FIG. 3, universal encodingregion 304 also encodes for an amount due and a due date. Universalencoding region 304 might also include error correction and detectiondata 306. Because biller B generates bill 202, which includes stub 300,biller B is free to change the C-B account number as needed for itsinternal operations.

[0029] The above descriptions of FIGS. 2 and 3 describe the elements ofa bill payment system in which data capture is performed by theconsumer. FIG. 4 shows details of particular data capture means and FIG.5 is a flow chart of a process for bill payment using the describedsystem.

[0030] In FIG. 4, three embodiments of a universal data capture meansare shown. FIG. 4(a) shows an optical reader 400 into which the consumerslides stub 300 for data capture. Alternatively, a hand-held reader,barcode wand, flatbed scanner or facsimile engine could be used. FIG.4(b) shows a magnetic strip reader 402 which reads a magneticallyencoded strip 404 on stub 300. Alternatively, strip 404 could bereplaced with MICR encoded data. Whether optical reader 400 or magneticstrip reader 402 are used, the captured data is transmitted to consumerterminal 204 for validation. Preferably, consumer terminal 204 providesan indication of validity and prompts consumer C to rescan universalencoding region 304 if a scanning error occurred.

[0031]FIG. 4(c) shows an embodiment of a universal capture meansprovided by a smart card. FIG. 4(c) shows a smart card 408 whichincludes a capability to read universal encoding region 304 off of bill300. Smart card 408 is shown with a VISA logo 406, a liquid crystaldisplay 410 and an array of electrical interface pins 412. To use smartcard 408, Consumer C simply scans each of the bills to be paid and thatinformation is stored internally to smart card 408. The information isdownloaded from smart card 408 in a variety of ways. If the smart cardis provided with other data entry means, such as an external key pad ora key pad built onto smart card 408, Consumer C can create the entirebill pay order using smart card 408. For example, Consumer C could scana bill, enter a payment amount (if different from the amount due) andhave a bill pay order generated within smart card 408. That bill payorder can then be transmitted to the payment network via electrical pins412. Alternatively, smart card 408 is provided with an infra-red output.Electrical pins 412 might be adapted to connect to an RJ11 telephoneadaptor simply a speaker output which emits DTMF tones, or a serial linkto a personal computer as to a device (wallet) with a wireless modem.

[0032] Another application for smart card 408 is for use in combinationwith ATMs. In this application, a consumer scans a number of bills,takes smart card 408 to an ATM and inserts smart card 408 therein. Usingthe key pad of the ATM, the consumer enters any additional information,such as a source of funds, a payment amount other than the currentamount due or an indication that the current amount due is equal to thepayment amount, the payment date if different than the bill due date oran indication that the bill is to be paid on the due date, etc. Thisinformation is used by the ATM in combination with the data obtained bysmart card 408 off the bills to generate properly validated bill payorders. The ATM then transmits the bill pay orders to the paymentnetwork.

[0033] The flow chart of FIG. 5 will now be described. The blocks of theflow chart are labelled S1 through S8, and are followed in numericalorder unless otherwise indicated.

[0034] The first step (step S1) is for biller B to send consumer C abill encoded with the universal encoding. Because it is universalencoding, any consumer can read, capture and validate it without priorcontact or arrangement with biller B. In a system where each biller isuniquely identified by a biller reference number (BRN), it would sufficeto encode the BRN as the biller identification field. Where the BRN isnot used, sufficient biller data to uniquely identify biller B isencoded, such as the biller name, address, telephone number, etc.Preferably, the BRN is used, since less encoding is required and anautomatic match-up of the biller identification field with a biller innetwork 208 is more likely.

[0035] When consumer C receives the bill and is ready to pay it,consumer C scans the bill electronically to capture the biller ID fieldand the C-B account number field (step S2). This information istransmitted from the scanning device to a computer (typically anappropriately programmed microprocessor) for processing. This couldeither be a personal computer controlled by consumer C or a processorbuilt into the reader. For example, the consumer terminal might be anintegrated telephone with a display screen, alphanumeric entry keys, aninternal microprocessor and a barcode wand or reader.

[0036] The captured information is validated (S3), and if found invalid,the consumer is prompted (S4) to rescan the bill, the bill is rescanned(S5) and then rechecked (S3). The data is validated at several levels.The first level is to detect whether the expected number of bits orcharacters were read. At a second level, the error-correction anddetection data included in the universal encoding region is used todetect and correct, if necessary, reading errors. At third level, thedata is compared to previously collected data from an earlier bill andthe data is validated using tables of valid biller ID's and C-B accountnumber ranges obtained from payment network 208.

[0037] Next (S6), consumer C enters a payment amount, a payment date andan identification of the source of the funds. Of course, consumer Ccould rely on defaults, where the default payment amount is the scannedamount due, the payment date is the scanned due date and the source offunds is a preset bank account at a preset consumer bank. The presetinformation might be stored in the consumer's personal computer, screentelephone or smart card.

[0038] The information obtained in step S6 is used to generate anelectronic bill pay order (S7), which is sent over payment network 208in lieu of sending a paper check with the paper remittance stub tobiller B. Once the bill pay order is electronically transmitted (S8) topayment network 208, payment network 208 handles all the other detailsof transferring the funds to biller B's account, sending A/R data 210 tobiller B for credit to consumer C's account with biller B, etc.

[0039] The present invention has now been described. In summary, oneapplication of the system is to electronically capture billeridentification and C-B account number identification at a consumer endof an electronic bill payment system to ensure that bill pay orders areaccurate without relying on correct data entry by the consumer. This isdone without prior contact between the specific consumer paying the billand the specific send of the bill.

[0040] The above description is illustrative and not restrictive. Manyvariations of the invention will become apparent to those of skill inthe art upon review of this disclosure. For example, the bill sent tothe consumer need not be in paper form, but could be electronic, such asa via electronic mail. In this alternative embodiment, the universalencoding region would be represented by a standardized section of thebill from which the biller ID and C-B account number are capturable. Thescope of the invention should, therefore, be determined not withreference to the above description, but instead should be determinedwith reference to the appended claims along with their full scope ofequivalents.

What is claimed is:
 1. A bill pay system wherein a consumer directs aconsumer financial institution to pay a biller's bill electronically,comprising: a bill generator, controlled by the biller to generate abill to the consumer, the bill including machine-readable data fieldscomprising at least a biller identifier field and a consumer-billeraccount number identifier, wherein a consumer-biller account numberidentified by the consumer-biller account number identifier is a numberused to differentiate the consumer from the plurality of consumers ofgoods or services provided by the biller to those plurality ofconsumers; means for sending the bill to the consumer; data capturemeans, controlled by the consumer, for capturing the machine-readabledata fields from the bill; validating means, coupled to the data capturemeans, for validating the captured data fields, wherein the validatingmeans and the data capture means are configured to provide real-timeresponse to the consumer if the validating means detects invalid datafields, the response being a prompt to recapture the machine-readabledata fields; a consumer terminal, coupled to electronically receive thevalidated data fields, which generates a bill pay order andelectronically transmits the bill pay order to an electronic billpayment network, wherein the bill pay order is directed to the biller byinclusion of the biller identification field in the bill pay order; andmeans, controlled by the biller, for crediting a payment amount of thebill pay order to an account indicated by the consumer-biller accountnumber.
 2. The bill pay system of claim 1, wherein the bill is a printedbill and the machine-readable data fields are printed on the printedbill and are optically readable.
 3. The bill pay system of claim 2,wherein the optically readable data fields are printed bar codes.
 4. Thebill pay system of claim 2, wherein the optically readable data fieldsare dot patterns.
 5. The bill pay system of claim 2, wherein theoptically readable data fields are glyphs.
 6. The bill pay system ofclaim 1, wherein the consumer is identified by a plurality ofindependent consumer-biller account numbers by a plurality ofindependent billers.
 7. The bill pay system of claim 1, wherein themachine-readable fields further comprise a due date indicator and anamount due indicator.